Question

true or false:

1. profit is the same as revenue.

true false

1. marketing promotions can increase revenue but reduce profit margins.

true false

1. a high profit margin means a business is managing costs effectively.

true false

Explanation:

1. Profit is calculated as revenue minus costs. So, profit and revenue are not the same.
2. Marketing promotions may attract more customers (increasing revenue), but if the cost of promotions is high, it can reduce the profit margin (profit margin = profit / revenue).
3. Profit margin = (revenue - costs)/revenue. A high profit margin implies that costs are low relative to revenue, meaning effective cost - management.

Answer:

1. False
2. True
3. True